Regional Victoria has long been one of Australia’s most desirable places to live. Whether it’s the rolling hills of the Macedon Ranges, the seaside charm of the Surf Coast, or the lifestyle opportunities in Ballarat and Bendigo, demand for housing outside of Melbourne has skyrocketed in recent years.

But with popularity comes pressure — and now, industry experts are sounding the alarm.

According to a new submission by the Real Estate Institute of Victoria (REIV) to the Parliament of Victoria’s housing supply inquiry, the regional housing market is being squeezed by a number of systemic issues. Chief among them? Property taxation.

🧾 Property Taxes: A Silent Supply Killer

The REIV’s data, collected in collaboration with regional real estate agents, found that 77% of respondents believe property taxation is a major constraint on housing supply.

High land taxes discourage new investment in regional properties, which leads to fewer rental homes being built or maintained. This, in turn, drives up rental prices and limits affordable options for local families. It’s a cycle that harms both tenants and long-term investors.

💸 Development Costs & Delayed Planning

Property taxes aren’t the only issue. The submission also highlighted:

• High development costs (74%)
• Complex and delayed planning processes (66%)
• Inadequate infrastructure in growing towns (37%)

For developers and investors, the message is clear: even if you want to build in regional Victoria, the red tape and overheads can be daunting.

📈 What This Means for Buyers, Renters, and Investors

REIV CEO Kelly Ryan explained that supply simply isn’t keeping up with demand. That imbalance has led to sharp price increases over the past five years, both for homebuyers and renters.

From an investment perspective, these challenges may seem discouraging. But for those who are willing to act strategically and navigate the changing landscape, regional Victoria still offers excellent long-term potential — especially if reforms are implemented.